Why Is AriZona Iced Tea Is Cheaper Than Water?

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Are You Thirsty?
Nothing tastes more refreshing than a cold beverage after a long, grueling day. Is it 100 degrees out? Pop open a cold soda. Did you just crush a workout at the gym? Reach for that bottle of water. Just ate a super salty (yet very delicious) burger? Order another iced tea. Whatever mood you’re in, there’s a beverage to quench your thirst. But have you noticed just how expensive the most basic, traditional, and necessary beverage can be? Yeah, we’re talking about water. Some companies are willing to charge you an arm and a leg for something that literally falls from the sky. (Yeah, yeah, I know. Water is not limitless. There are droughts and global warming and whatnot.)

Still, the price of water can be pretty shocking. Next time you go into your nearest 711 or into the gas station’s market when you are pumping gas, head to the beverage section. Check out the selection of bottled water and take a look at the prices.


Some Swanky Water
Start swanky with some Fiji water. A bottle of this island goodness will cost you $1.50 on average for a 12 oz. bottle. If you want your skin to look like Jennifer Aniston, maybe you want to invest in some Smart Water for $2.00 for a .5 liter bottle. Or how about some fancy Evian for more than $2 for a liter?


Just Your Average Water
Or even if you go for the “cheap” stuff like Dasani, Aquafina, or Poland Spring, you will still need more than just a $1 bill to quench your thirst. Damn that is a whole lot of money for just water. Plain ol’ water. You know what water tastes like? Literally nothing. Don’t get me wrong, I love water, but it has no flavor. And we are paying A LOT of money to drink a flavorless beverage.


How About Some Iced Tea?
But then head over to your ice teas and you will see that huge can of AriZona Iced Tea that is only 99 cents. It is still just 99 cents and it has been 99 cents since 1992.


Cheaper Than Water
That 99 cent stamp is branded right on the can, so no matter what the deli or bodega wants to charge for other beverages, that price is staying put. So why is AriZona Iced Tea cheaper than water?

The 99-Cent Initiative
AriZona’s price point is part of the 99-cent initiative that AriZona founded in 1992. It’s been 25 years since they set the price and the company doesn’t plan on raising the price anytime soon.


From The Owner’s Mouth
Spencer Vultaggio, the Chief Marketing Officer, Co-Owner and son of the company’s founder Don Vultaggio , says that you can count on that price for years to come. So how can they afford to never raise their prices?

Just Say No To Excessive Advertising!
Have you ever seen a commercial for AriZona Iced Tea? How about an online ad? A billboard? A celebrity endorsement? No you haven’t and here is why:

According to Vultaggio, “We’ve been 99 cents for more than 15 years now. It’s a big part of our overall strategy, and our business model is such that we don’t advertise for example, and we put those costs towards giving our consumer the value they want and expect.”


Money Wasted
So when you see that water and other beverages are more expensive it is because they are putting Jennifer Aniston’s face all over their commercials. It is because Pepsi and Coke produce high budget commercials. It is because of their fancy packaging and branding. To AriZona it isn’t worth it and they feel like that is just money wasted.


Keeping Costs Low By Working Smarter
But how do they keep up with the times?

“It comes down to incorporating new technology into our entire process,” Vultaggio said. “We pack our cans at almost double the speed as we did in the late ’90s, we’ve thinned out the cans using 40% less aluminum and using more recyclable materials. In terms of shipping costs, we move our trucks at night now to avoid traffic, we produce in more than 40 factories across the country so our trucks often don’t have as far to go. It’s really about working smarter.”

Save Your Money
Vultaggio goes further to say, “We feel like it’s more important to spend money on something that our customer really cares about, instead of buying billboards or putting our cans in the hands of some celebrity for a few minutes.”


Keeping Their Customers Happy
So there you have it. Why spend money on expensive ad campaigns when they keep the product at a super low cost and keep their customers happy?

Make Some Noise
In the beginning of the initiative they made their drinks 99 cents to make some noise and it worked. It seems to still be working so why fix it if it ain’t broken?

“The cans are synonymous with 99 cents now. Our fans love it. They recognize it, and it’s a big part of our allure. People really do appreciate that. They’ve grown up with us, and they’ll always know they can head to their local store and our drinks will be 99 cents,” Vultaggio said.

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